Step 1:
Sign Up and Join SeedInvest
Enter your name and email address to unlock access to vetted startups and make investments seamlessly online.
In order to determine what you are legally able to invest in, we are required to verify whether you are an Accredited Investor or a Non-Accredited Investor.
What is an Accredited Investor?
An "Accredited Investor" is defined by the Securities and Exchange Commission as someone who meets at least one of the following requirements:
- Has an individual net worth, or joint net worth with your spouse exceeding $1 million (excluding the value of one's primary residence)
- Has an income exceeding $200,000 in each of the past two years and expects the same this year
- Has an income (with your spouse) exceeding $300,000 in each of the past two years and expects the same this year
- Invests on behalf of a VC firm or other registered investment company
- Invests on behalf of a business with $5 million in assets and which was not formed for the specific purpose of acquiring the securities offered
- Any entity in which all of the equity owners are Accredited Investors
What is a Non-Accredited Investor?
A "Non-Accredited Investor" is any individual or entity that does not meet the definition of an Accredited Investor.
Please note that you do not need to be an Accredited Investor to invest through SeedInvest.
Step 2:
Customize Deal Flow
We will personalize your SeedInvest experience during the sign up process. By providing us with information about yourself and your investment interests, we will be able to suggest potential companies based on your preferences.
Customize your investment goals by telling us how much you have put aside to invest and what portion of that you would like to invest in startups.
How much should I invest in startups?
During the process of personalizing your experience on the platform, we will guide you through the various factors that you should consider when deciding how much of your portfolio to put into startups.
How to connect with us?
Step 3:
Browse Vetted Deals
Explore all of the vetted investment opportunities on the offerings page.
We strive to feature a broad assortment of companies on SeedInvest in order to appeal to our entire investor network. Once you find something that interests you, you may continue on to the company's profile to learn more or simply follow the company in order to be kept in the loop.
How does SeedInvest get its dealflow?
Our venture team actively sources deal flows in three different ways:
- Referrals from venture capital funds, incubators, accelerators, and angel groups.
- Our venture team is dedicated to keeping a pulse on venture activity and establishing relationships with companies we've identified as trending.
- Organic - we are fortunate that many companies hear about SeedInvest through word of mouth and apply directly online.
How does SeedInvest vet companies?
All companies marked as "Vetted" have successfully gone through our complete due diligence process, which includes internal business due diligence and outsourced legal and confirmatory due diligence.
- Legal and confirmatory review includes:
- The organization of the company
- The corporate structure and ownership
- The people behind the company
- Information provided to investors
- Investor information and terms of the offering
- Review of Transaction Documents by Outside Legal Counsel
- Business due diligence generally includes:
- Problem or inefficiency being addressed
- Product / service overview, stage of development and anticipated milestones
- Demonstrated traction (e.g. revenue, pre-sales, purchase orders, signed contracts, media coverage, awards, etc.)
- Data to support claims made in marketing materials (e.g. user / customer metrics, signed contracts and agreements, product demonstrations, etc.)
- Growth strategy
- Employees and advisors (including ownership structure)
- Addressable market (e.g. size, growth, penetration, etc.)
- Competitive landscape and industry dynamics
- Exit opportunities
- Intellectual property
- Historical financials
- Financial projections (including error-checking, evaluation of key assumptions and reconciliation to stated growth plan)
- Reference checks (e.g. previous investors, advisors, etc.)
- Investment overview (including determination of key terms, uses of funds, and current and previous investors)
- Investment Committee review
Step 4:
Do Your Homework
Investing in startups is inherently risky. It is important for you to do your own independent due diligence to mitigate those risks.
Take a closer look at the companies that you're interested in. Get to know the companies by leveraging the SeedInvest team and connect with the companies' founding team members. Take a deeper dive into the due diligence materials uploaded to the data room.
What is due diligence?
Due diligence is an investigation into a business for the purpose of being able to make an informed investment decision.
- Get to know the company you are looking to invest in by viewing their investor deck, any financial documentation, and term sheet.
- Connect and communicate with the founding team members.
- Understand the industries and marketplace in which the company is positioned.
- Do research about the company outside of the SeedInvest platform.
- Share the deal with your colleagues and get outside opinions. Feedback is valuable, but also remember that you're the one writing the check.
How to connect with startups?
Investors may directly message the company by visiting the company's profile page. Investors may also participate in conference calls and in-person events scheduled by SeedInvest.
Step 5:
Make Investment
Making an investment on SeedInvest is simple. Click the "INVEST" button on the startup's profile page and follow the steps to complete your investment.
Invest as an individual or through an entity (such as LLCs or Trusts).
What are the steps to making an investment?
- Click the "Invest" button on a given company's profile.
- Enter your investment amount.
- Verify your identity and accreditation status.
- Execute the required legal agreements.
- Enter the account information of your bank account (checking or savings) or choose to wire the funds.
- Confirm your investment.
Where does my money go?
Once you confirm your investment, the funds will be transferred to an escrow account for safe-keeping until the fundraising is closed. Once the fundraising round closes, you will receive confirmation of success and a link to the counter-signed legal agreements. Upon the completion of certain closing mechanics and compliance checks, the funds will be transferred to the startup.
Step 6:
Manage Your Portfolio
Making your first investment is just the beginning of building a portfolio of private company investments on SeedInvest.
Most experts suggest that investors invest in at least 10-15 private companies in order to enhance your diversification. Keep an eye out for companies in different industries and come up with a plan for adding additional investments over time.
Also, stay up-to-date by returning to SeedInvest to read updates from your portfolio companies.
How to monitor your portfolio?
You can view a list of all of your investments on your portfolio page as well as access your final investment documents on this page.
SeedInvest is currently building out powerful reporting tools which will streamline company reporting and shareholder tracking.
What are best practices for building a portfolio?
Investing in private companies is much different than investing in public stocks:
- Invest in at least 10-15 private companies in order to increase your chances of generating higher overall portfolios. Investors should never consider investing in solely one or two private companies.
- It is critical to allocate only a small percentage of your overall portfolio to private companies, typically no more than 5-10%. Investors should be mindful of future diversification as they consider how much to invest per company.
